China issues circular to restrict aluminium expansion

* Urges stop of 7.74 million tonnes planned projects

* Individuals could be held responsible (Adds details, background)

HONG KONG, April 20 (Reuters) - China on Wednesday called on central and provincial authorities to stop approving the construction of new aluminium smelting capacity in a circular posted on a government website.

Nine ministries and departments jointly issued the circular, which reiterates Beijing's policy of restricting aluminium capacity.

The notice, described as "urgent", was published on the website of the Ministry of Industry and Information Technology on Wednesday. (www.miit.gov.cn)

Capacity could reach 30 million tonnes by 2015, from 23 million tonnes at the end of 2010, if 23 planned projects were approved, the circular said.

The planned projects had a total of 7.74 million tonnes of annual capacity with combined investments of 77 billion yuan ($11.79 billion), the circular said.

China's aluminium production was 15.6 million tonnes last year, a utilization rate of about 70 percent based on end-2010 capacity.

The circular, dated April 14, confirmed media reports last week and showed renewed enforcement of a central government policy of controlling aluminium smelting capacity by denying approval to any new smelters. [ID:nTOE62808F] [ID:nL3E7FB0OR]

The circular ordered the authorities to halt planned projects from the day the circular was dated.

In a slightly tougher tone compared to previous circulars on the similar subject, the latest one said individuals could be asked to take legal responsibility if state policy was not followed.

Industry officials and analysts have said Beijing's pressure on its aluminium industry to limit growth could fail without support from regional governments hungry for projects to generate jobs and boost economic growth.

Previous efforts by Beijing to rein in the sector had started to bite during late 2007 and 2008, but were relaxed during the financial crisis and in some cases replaced by incentives to expand output as China strove to maintain employment and growth.

Even if successful, the current scheme is probably too late to prevent some 3 million tonnes of smelting capacity expansion underway from coming on stream this year, and another 3 million tonnes due online through 2013. ($1 = 6.530 Chinese yuan) (Reporting by Polly Yam; Editing by Michael Urquhart)

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